Close
Home » Articles »   By WLJ
 
 
Thursday, December 20,2007

Fed cattle trade expected to rise sharply higher, boxed beef prices jump $14

by WLJ
Cattle markets found their feet last week and prices started moving higher, strengthened by a $14 rise in the Choice boxed beef cutout in seven days. Although trade was limited in the fed cattle market last week, there was some light trade last Thursday in Nebraska at $147 dressed. Bids in other major feeding areas were still well apart. However, most expected a trading range of $92-$93 live basis and $148-$149 dressed. The last fully established fed cattle trade came late in the day on Feb. 2 at $91 in the southern Plains. In Nebraska, live sales were at $90 and dressed cattle sold for $145. In Colorado, live sales were at $89.50 and dressed sales at $142.50-143 and in the western Corn Belt, live cattle traded at $90 and dressed sales were in a range of $143-145. The jump in the boxed beef market allowed packers to put some black ink on their bottom line last week. HedgersEdge.com calculated packers were earning $51.70 per head harvested last Thursday and the cutout value was still moving higher. That positive news means that cattle feeders would likely be in a good position to push cash prices toward the high end of their asking prices. A substantial drop in fed cattle weights and a lack of available Choice grading cattle will continue to be bullish for the markets for the weeks and months ahead. According to USDA, finished cattle weights have declined 15 lbs. on average and Choice and Prime grading cattle percentages have slipped since early January. Weather stress is taking its toll on feedlot cattle, however, lighter weights will cut back production and increase kill levels as packers work to meet demand for high-end product. All of which should help boost prices in the first and early second quarters this year. Some of that was readily apparent last week by looking at the boxed beef prices and movement. Choice boxed beef last Thursday was trading 21 cents higher than the previous day at $155.68 and Select was up 58 cents at $147.11 on light to moderate demand and light offerings. However, packers were increasing harvest levels to take advantage of the price spike. Thursday’s slaughter was estimated at 123, 000 head, which was up from 118,000 the prior week and 113,000 during the same day in 2006. For the week, through Thursday, packers had harvested a total of 484,000 head, just 1,000 fewer than the prior week’s total, but still well above the same period last year when 437,000 were slaughtered. The cow beef market was steady last Thursday at $115.42, well above last year’s price of $108.55. The 90 percent lean market was also higher than a year earlier at $144.12 versus $138.73. Prices for 50 percent lean product, however, were nearly $14 lower than a year earlier at $53.85. James Mintert, agricultural economist at Kansas State University, said that the effect of this winter is likely to stick with the market for much of the first half of the year, lending further support to the market. “So, is the effect of this year’s winter weather all behind us? I don’t think so. Based on past experience, the effect of winter weather on cattle performance, marketing rates, and weights is likely to linger through the rest of the winter and probably much of the spring quarter,” Mintert said. “Dressed steer weights have fallen 12 pounds since the first of the year vs. a five-year average decline of just 5 lbs. and were fractionally below a year ago in late January. Weights are expected to continue to fall more sharply than normal as poor feeding conditions are more widely reflected in market ready cattle. And fed cattle slaughter volume is likely to tighten as winter turns to spring. This combination should lead to reduced boxed beef production which will be supportive of fed cattle prices in late winter and spring.” It was clear that fed cattle traders had similar expectations last week. On the Chicago Mercantile Exchange (CME), live cattle futures were well above week earlier numbers. The February contract was slightly lower during the session last Thursday, however, it closed at $94.12, a premium to the cash market and nearly $1 higher than the prior week. April live cattle contracts were higher at the end of the session last Thursday, closing up 12 points at $96.40, nearly $2 higher than a week earlier. June live issues were down 22 points, closing at $93 and August lost 10 points to close the day at $90.15. Feeder cattle The jump in the fed cattle markets offered a boost to feeder cattle prices last week in most areas. The CME feeder cattle index was at $98.40, nearly $2 above week earlier levels. The feeder cattle market was supported by rising feeder contract prices and a steady corn market, at least for the March contract, which last Thursday was trading at $4.07 per bushel on the Chicago Board of Trade. However, feeder cattle prices are still below year ago levels, according to Mintert. “Despite last week’s price increase, heavy weight feeder steers are still priced about 10 to 13 percent below a year ago in Kansas and Nebraska, respectively. High corn prices have had an even bigger impact on light weight steer prices as prices for 500-600 lb. steers in Kansas were down 19 percent and Nebraska prices for the same weight steers were down 17 percent, compared to a year ago,” he said. Corn crops from South America are nearing harvest, which has kept a lid on the grain trade in recent days. However, any apparent shortage in foreign crops, which could trigger additional U.S. export or a March plantings report which shows the potential for a short U.S. crop, could mean all bets are off. A short U.S. corn crop could spell disaster for feeder cattle prices, so market analysts are cautioning producers to keep an eye on the grain markets. Already, weather problems are preventing corn growers from completing necessary field work. Substantial delays could cut into yields later in the year, a problem the beef business would prefer to avoid. For now, however, cattle buyers are taking advantage of the sideways corn trade to bid up prices on feeder cattle. For example, in Three Rivers, TX, last Wednesday, feeder steers traded $5 higher, while feeder heifers traded in a range of $2-4 higher than the prior week with some instances of as much as $10 higher on the better kinds. Trade and demand was called good with a good test in all classes. In Belen, NM, last week, feeder steers and heifers under 600 lbs. traded hands for prices as much as $5-7 higher than the previous week. Those cattle over 600 lbs. were called steady. Good buyer participation was noted since much of the snow in that area had melted. In Oklahoma City, OK, there was a big jump in the number of cattle consigned, with many of the offered lots coming off of wheat grass. Feeder steers were called steady to firm at the sale, while feeder heifers were steady to $1 lower, with most of the decline on those cattle weighing more than 750 lbs. Steer and heifer calves were mostly steady to $2 higher on moderate to good demand although buyers were reportedly more selective for kind and condition last week as a result of more winter weather in the forecast. In West Plains, MO, steers under 700 lbs. and heifers in all classes sold steady to $2 higher last week with a few stocker steer calves under 350 lbs. as much as $3-5 higher. Heavier weight steers were lightly tested, although the few sales in that class were called steady to weak. Supply at the sale was reportedly very light with good demand. In Loup City, NE, last week, feeder steers and heifers trended fully $4-6 higher. Overall cattle quality was good, with the bulk of the offering over 700 lbs. Demand was called very good from a broad buyer base. Runs of feeder cattle in the northern states remain seasonally light and trends are difficult to spot. However, in most areas, prices were trending higher last week. In Mitchell, SD, last week, feeder steers and heifers sold steady to $2 higher, with the increase mainly on the lighter weight cattle. There were reportedly many load lots in the offering and buyer demand was called good. On the West Coast, pasture conditions remain relatively dry and prices remain depressed slightly as a result in those areas. For example, in Madera, CA, the stocker and feeder cattle on offer were mostly steady with the prior week’s sale despite a light test of the market. Steers in the 500 lb. class sold in a wide range of $92-107.50, while heifers in the same weight class brought $80-93.50. Steers in the 600 lb. class sold between $83 and $92.75, while heifers in the class brought $77-89.75. Seven-weight steers sold in a range of $80-91 and 700-799 lb. heifers sold from $76 to $84.

Read more
Thursday, December 20,2007

Feeder prices rise despite steady corn market gains

by WLJ
Packer margins were greatly improved last week as a result of the higher boxed beef and kill levels, so it appeared that most fed cattle trade would wait until sometime last Friday. As of press time, feedlots were offering cattle at $93 live and $1.47 dressed, while packers improved their bids last Wednesday to $89 live and $1.45 dressed. Market analysts last week were predicting trade to be steady to $1 lower at $90 live and $1.45-$1.46 dressed. Meanwhile, last week, packers were working through as many cattle as possible in an effort to take advantage of some of the best profit margins in months. Last Thursday, packers slaughtered 125,000 head, compared to 123,000 the prior week and 113,000 on the same day in 2006. For the week through Thursday, packers had harvested 478,000 head, compared to 484,000 a week earlier and 426,000 during the same week a year earlier. Much of the decrease in week-to-date numbers last week was the result of a holiday shortened week which limited harvest last Monday at some packing plants. While packer margins have been positive, feedlot close out numbers have been less than impressive for the past several months. With winter stress, caused by severe weather in the Plains early in 2007, margins aren't likely to improve much for the next month. However, as relatively expensive feeder cattle are marketed during the first quarter, conditions are expected to improve, according to Utah State University Agricultural Economist Dillon Feuz. “Based on my estimates, feedlots in Nebraska lost money on average most weeks during 2006. My estimate for the year was an average of negative $42 per head. The start of 2007 hasn’t been any better. In fact, by my estimate, average feedlot losses have been near $90 per head for the first several weeks of 2007," he said. "The combination of higher feed costs and harsh winter conditions have pushed total cost of gain to around $75 per cwt. Many of the cattle that have been marketed in 2007 were placed on feed before feeder cattle prices declined sharply this past fall. However, as we move forward, an increasing number of fed cattle marketed will have been placed on feed at relatively lower feeder cattle prices.” Feuz said the most pressing question remains: ‘When will profitability improve?’ He said current estimates indicate first quarter losses will remain in the range of about $75 per head. “However, by the time we get into the second quarter, feedlots should be closer to breakeven on most pens marketed. Returns for the second quarter could average around $5-10 per head,” Feuz said. “Feedlots will need to pay close attention to feed costs at the time of cattle placement and then look for opportunities to protect against higher feed costs if they want to find a few dollars in cattle feeding this year.” One of the biggest factors expected to influence the fed cattle markets this year could be a shortage of available fed cattle later this year. In advance of last Friday’s cattle on feed report, market analysts were predicting January placement numbers to be well below year ago numbers as a result of severe winter weather during the month. Analysts also caution that the death loss, recorded as ‘Other Disappearance,’ could also be extremely high and play an abnormally important role in the number of cattle on feed in the U.S. According to figures from the Livestock Marketing Information Center, the number of cattle on feed is expected to be 1.8 percent below Feb. 1 of last year. Placements are predicted to be 14 percent below January 2006, and the number of cattle marketed is expected to come in 4.2 percent above year ago levels, mostly as a result of an additional marketing day during the month. If the numbers come in as predicted, and feedlot placements continue to trend below normal levels, then fed cattle supplies should be expected to tighten later this year. Adding to that condition could be the trend toward heavier placement weights. Cattle this summer will likely spend more time grazing to reach heavier weights before being placed in feedlots. If grass is available this summer, the placement trend could continue for several months as feeders attempt to avoid the negative impact of $4.50 corn as long as possible. Some of that sentiment was readily apparent in the futures markets last Thursday. Several new live cattle contract highs were reached during the day for the second consecutive session. However, prices pulled back slightly to close in a narrow range both sides of unchanged. February live cattle ended unchanged at $93.47 and was the only contract that failed to match or make a new contract high during the day’s trade. April fed cattle contracts were down 17 points, closing at $96.22, while June was up 27 points, closing at $93.95. August and October were also slightly higher, closing the day at $90.87 and $94.55 respectively. Feeder cattle Feeder cattle prices enjoyed a slight boost last week as the Chicago Mercantile Exchange cattle feeder index increased to $99.03, up slightly from the previous week. There appeared to be little cause for the increased prices as corn futures for March increased to $4.34 on the Chicago Board of Trade last Thursday compared to one week earlier when it traded at $4.07 per bushel. Derrell Peel, extension livestock specialist at Oklahoma State University, attributes the slight increase not to higher fed cattle prices, but to the realization that feeder supplies are relatively tight. He also said it's not a matter of not wanting to feed cattle because of higher corn prices, it's simply a matter of wanting to feed a different kind of cattle. Peel expects this fall, the industry will transition from a lightweight cattle on feed market to a heavyweight yearling market. In the cash markets last week, increased moisture across California made producers a little more optimistic. Many producers are purchasing cattle in hopes of running them on grass to obtain heavier weights before placing them in feedlots. “There is some optimism despite increased corn prices and other things in the industry. I think producers are realizing that we’ll be okay,” said Jake Parnell, manager of Cattlemen’s Livestock Market in Galt, CA. Parnell said prices were good on lightweight feeder cattle and producers were prompted by significant rain and warm temperatures to buy. He said many cattle buyers are hoping to put the lightweight cattle out on grass in the coming weeks. Parnell added that heavier weight cattle were also selling well. This can be attributed to the feedlots’ demand for heavier weight cattle that require fewer days on feed as corn prices continue to soar. In Galt, CA, last week, feeder cattle of all weights were $3 higher than the previous week. Large lots of five to six weight steers sold for $98 to $113. Heifers at the same weights sold for $92 to $103. Smaller lots of steers sold for less at $88 to $100, while their heifermates in small lots sold for $85 to $98. To the west, feeder steers in Riverton, WY, were up $1-2 last week. Heifer calves were steady to slightly lower on a limited offering. Demand for feeder cattle was good with 515 to 585 lb. steers selling for $113.50 to $126. Heifers of similar weights sold for $92 to $101. Heavier weight steers were down by almost $2 this week, with nine weight calves selling for an average of $93. In La Junta, CO, steer and heifer calves under 600 lbs. were $1 to $2 higher. Yearling feeder steers were steady to $1 higher while yearling heifers remained steady. Steers weighing 550 lbs. averaged $124.50 while heifers that were similar in weight brought $99 to $102. Steers over 800 lbs. sold for an average of $95 while heifermates sold for an average of $91. In Lexington, NE, feeder steers and heifers traded mostly steady to $2 higher with some instances of $3 to $5 higher. Offerings consisted mostly of ranch raised, one iron cattle, with weigh-in conditions in the buyer's favor, with only a few consignments carrying mud. Demand was very good and trading was called moderate to active. Steers weighing 527 lbs. sold for an average price of $127.25 while heifers at similar weights sold for $108.18. Eight weight steers brought $97.71 while heifermates sold for $93. Feeder steers in Huron, SD, sold steady to $3 lower and lightweight feeder heifers were steady to $2 higher. Heifers over 700 lbs. sold steady to $2 lower. Demand was reportedly good. Five weight steers averaged $125 and heifers at a similar weight sold for $108. Steers weighing 750 to 800 lbs. averaged $94.10 while heifers in the class sold for an average of $89.87. Feeder steers and heifers in Oklahoma City, OK, were steady to $2 higher last week. Steer and heifer calves were $2 to $4 higher. Demand was reportedly very good for all classes, especially cattle headed for grazing. The sale included several cattle that recently came off wheat pasture in medium to heavy flesh conditions. Demand for feeders late in the day diminished some, especially in cattle over 750 lbs. Steers ranging from 550 to 600 lbs. averaged $118.02. If the steers were verified value added, they averaged $122.38. Meanwhile, 850 lb. steers averaged $93 to $98. Heifers averaging 577 lbs. called for $100.82. Heifers weighing an average of 824 lbs. averaged $91.57. Amarillo, TX, sold feeder steers and heifers firm to $3 higher last week. Five,weight steers averaged $116 and heifers weighing between 500 and 600 lbs. sold for $95.50 to $101.50 respectively.

Read more
Thursday, December 20,2007

On feed report adds fuel to fed market

by WLJ
The cash feedlot trade was again slow to develop last week, however there were been a few deals reported at mid-week in Colorado on a few thousand head at $90.50 and in Nebraska’s dressed market for $146. The rest of cattle feeding country was quiet last Thursday with feeders offering prices at $94-$95 live basis in the south, and $93-$94 live or $148 dressed in the north. Packer bids were at $89 in the south and $90 live, and $144 dressed in the north. The last established market was Friday, Feb. 23, when Texas Panhandle live sales traded at $91. Kansas live sales traded at $91 live and $145 dressed. Nebraska live sales were at $90 and dressed moved at $145. Colorado traded cattle in a range of $90-91 live and $145 dressed and in the Corn Belt, live sales traded at $90-91 and dressed sales came in a range of $145-146. Analysts last week were expecting the fed cattle market to trade in a range of $91-92 live and $145-147 dressed basis as a result of gains on the Chicago Mercantile Exchange (CME) last week and the strong kill levels being maintained by packing plants. Harvest volumes were averaging about 10,000 head higher than the prior week. Last Thursday’s harvest was estimated by USDA at 118,000 head, which would be 7,000 head below the prior week and 1,000 head below the same day a year ago. The week-to-date slaughter stood at 488,000 head, which was 10,000 head above the prior week’s level of 478,000 head. Much of the optimism on the CME was the result of a very positive cattle on feed report which showed placements down 23 percent from year-ago levels. That, combined with an overall drop in the number of cattle in U.S. feedlots from last year, should prove to be a positive factor for the fed cattle market later this year, according to Virginia Tech Commodities Marketing Agent Mike Roberts. “This is the fifth month placements have run behind last year but the first time in almost a year-and-a-half that supplies on feed were lower than last year at this time,” he said. He encouraged cash sellers to liquidate cattle from pens “as soon as they are ready.” In addition to taking advantage of an upward movement in the market, this movement will also free up pen space for relatively lower priced feeder cattle. However, there was also some negative news in the report in the form of fed cattle marketings during January. Marketings were reported to be only 1.7 percent above January 2006, despite one additional marketing day. Some of the slowdown was the result of poor shipping conditions which prevented movement of cattle from feedlots to packing plants. But the slowdown in beef demand, both at the wholesale and retail level, also likely played a role in the lackluster movement of fed cattle. Despite early week strength in the live cattle contracts on CME, prices fell back later in the week last week. In last Thursday’s session, prices were lower across the board and contracts had mostly shed any early week gains. The April contract lost 90 points, to close at $96.15, while the June contract shed 112 points, to end the session at $94.37. The other reason for the upward swing of fed cattle prices was the boxed beef market which continued its seasonal advance last week as buyers continue to chase Choice middle meats for sale later this spring. Last Thursday, the Choice cutout closed 42 cents lower to settle at $148.40 and the Select cutout lost three cents, closing at $141.91, narrowing the spread to just $6.49. Sales volume was good on heavy offerings with 588 loads of beef sold. The cow beef market last week worked its way lower, contrary to normal seasonal trends. The cow beef cutout closed last Wednesday at $111.83, down 84 cents from the previous day. That figure was off nearly $5 from the previous week and last year. Cash cow prices last week were still fair, however, most cash markets reported a $1-3 drop in prices for the high dressing cows. Most were in the upper $40 to mid-$50 range in auction markets. Producers that held their culls for feeding through the winter are now beginning to bring them to market, causing some price pressure. Adding to that is speculation over the Canadian border opening to cattle born after March 1999. The Canadian cow market is trading at a $20 discount to the U.S. market, so if the border does swing open to cow imports, it could have a detrimental effect until prices equalize. Feeder Cattle Feeder cattle markets last week showed some optimism in many markets as buyers begin to source cattle for spring grazing programs. Heavier weight cattle that will finish quickly are also in demand as buyers look at hedging opportunities available this spring. The CME cash index was slightly higher for the week, gaining 27 cents from the prior Thursday. The live cattle contract market also added some support to feeder cattle contracts early in the week, while a slight dip in the corm market provided mid-week support. Corn contracts on the Chicago Board of Trade moved lower throughout the early part of last week. By last Thursday, the March corn contract was back to $4.17 per bushel, down from $4.40 the previous week. That slump, despite its likely short life, allowed feeder contracts to gain some ground last Thursday as contracts were over $100 across the board once again at the close of the market. The spot month contract gained 80 points, closing at $102.40, while April lost 15 points to close at $104. Deferred months were also higher. August contracts gained 10 points, closing the day at $106.35, and September gained 20 points to close at $105.20. October feeders gained 7 cents, ending the session at $105.47. In auction market trade last week at Famoso, CA, stocker cattle met with excellent demand as a result of some much needed precipitation in much of California. Feeder cattle also sold well, with the best action on steers and heifers in the 650-750 lb. class. In Toppenish, WA, feeder cattle were steady to $3 higher. Trade was moderate with good demand. Steers weighing 600 to 650 lbs. represented the largest group of cattle sold and averaged $103.21. Heifers sold for quite a bit less as animals at similar weights sold for only $55 with significantly lighter representation. Heifers weighing 650 to 700 lbs. brought an average of $70. In the northern Plains at West Fargo, ND, 650 to 800 lb. steers sold $1 to $2 higher last week. Feeder heifers sold mostly steady on a light test. Demand in the area was moderate. Steers weighing 567 lbs. sold for $109.50 and eight-weight steers brought an average of $93.50. Heifers weighing 634 lbs. sold for $94.55 and heifers averaging 814 lbs. sold for $86.58. In Torrington, WY, steers and heifers were $1 to $3 higher than the previous week and 450 to 550 lb. heifers sold $4-6 higher. Demand in Torrington was called moderate to good. Steers averaging 680 lbs. averaged $105.86 and 650 lb. heifers sold for $106. Eight-weight steers sold well at $102.71 while their heifermates brought an average of $93.75. In La Junta, CO, steer and heifer calves sold steady, except 500 lb. steers which traded $5 lower than the previous week. Reports called the trade active and demand good. Young calves, such as three-weight steers, sold for an average of $154.60 while heifermates went for $120. Steers weighing 500 lbs. sold for $116.14 and the heifers of similar weight brought $97.38. In Burwell, NE, feeder steers and heifers trended $4 to $6 higher compared to the last sale two weeks prior. There was reportedly strong demand at the auction. Steers averaging 531 lbs, sold for $119.84 while heifers of similar weight averaged $107. Heavyweight steers averaging 773 lbs. sold for $102.49 and heifers weighing 786 lbs. brought $92.98. In Joplin, MO, steers and heifers were called steady to $2 lower. Demand and supply were moderate. Fleshy steers averaging 525 lbs. sold for an average price of $115.11 and heifers of similar type and kind averaged $105.14. In Oklahoma City, OK, steers over 700 lbs. were called $1 to $2 higher. Heifers of similar weights were steady to $1 higher. Both steers and heifers weighing under 700 lbs. were steady to $2 higher. Demand reportedly improved throughout the sale and gained extra strength after cattle futures closed sharply higher last Monday. Feeder cattle were in slightly thin to moderate condition. Steers averaging 527 lbs. sold in a range of $118 to $125 and heifers of similar weight sold between $104 to $111.50. In the southern tier, at Amarillo, TX, feeder steers and heifers were mostly steady with a higher undertone noted on steers under 500 lbs. Steers weighing between 500 and 600 lbs. sold from $107 to $113, while the heifers sold for $93 to $102. Heavier weight steers, between 800 and 900 lbs., sold for an average of $96.25.

Read more
Thursday, December 20,2007

Fed cattle trade expected over $1

by WLJ
There was only very light fed cattle trade last week as of press time. In the northern tier fed cattle market, there were a few thousand head traded at $160 dressed basis, which was about $5 higher than the prior week’s sharply higher weighted average. However, in the remainder of cattle feeding regions, ask and offer prices were still well apart. Fed cattle in the southern tier were expected to trade in a range of $100-101, as much as $1-2 higher, although it appeared likely that packers would wait until last Friday to replenish what were thought to be relatively short supplies. The last fully established market for fed cattle was the previous Friday, March 9. Live sales traded at $98-99 in the southern Plains. In the North, live sales traded at $97-99, with dressed sales at $155. Erica Rosa, agricultural economist for the Livestock Marketing Information Center (LMIC), said last week that good management at the feedlot level has contributed to the current run up in live cattle prices. “Cattle feeders are in a good position right now and the market is a reflection of that. The rise in prices is a combination of feeders doing a good job of controlling inventory and a lot of light-weight placements last year, which cattle feeders can better manage for market timing,” Rosa said. “Cattle feeders have been watching the rising prices in wholesale markets and are realizing that there hasn’t been an increase in buying by packers or a reduction in kill-level.” That’s put feedlots in a solid position to hold out for better money as the market moves toward its normal seasonal peak sometime in March or April. Although she declined to speculate about where or when the market may reach its peak. “We are going to see the wholesale prices drop off. Packers are going to need to move some product. Cutout prices are up right now, but the movement is low,” she said. “LMIC is predicting that we won’t see these prices continue through the summer. We expect to see the normal seasonal decline. In the meantime, I think there will only be hand-to-mouth buying.” The fed cattle markets were heavily influenced by the rise in boxed beef prices last week, which spent the week above the $160 level, its highest rise in nearly two years. Packers were willing to return some of their positive margins to feedlots in exchange for the light supply of market ready cattle. The predicted drop in quality cattle, as a result of tough winter feeding conditions, appears to be impacting the current market. That is translating into a shortage of high grading cattle, causing packers to hunt for enough supply to meet current market demand for Choice product. The Choice cutout last Thursday closed the day at $166.63, down 90 cents from the prior day but up more than $8 from the previous Thursday. Select was up 64 cents for the day, ending the day’s trading session at $156.62. Packers reduced their harvest to just 123,000 head last Thursday, down 3,000 from the prior week and 1,000 below year ago levels. For the week through last Thursday, packers had harvested a total of 492,000 cattle, down from 495,000 for the same period the previous week, but up from 480,000 a year earlier. Rosa said another factor in the market run up in recent weeks is the big drop in carcass weights from historical highs reached last year. She attributed the decline to a combination of the weather during the past three months and the high price of corn. Average live weights have declined from an average of 1,282 lbs. during the same week last year, to an average of 1,277 last week. Carcass weights have shown an even greater decline. Last year, carcass weights averaged 783 lbs. Last week, carcasses averaged just 768 lbs. However, despite lighter weights, kill levels are running above year ago totals, so actual beef production is ahead of last year on a week to week comparison. Last week, production totaled 483.7 million pounds, according to USDA estimates. During the same week in 2006, production reached just 481 million pounds. The rise in production over last year is mostly a result of packers trying to take advantage of currently favorable margins despite lackluster movement at the wholesale level. That means much of the current production is being held in cold storage waiting for a future buyer at what could be a fire-sale price as packers look to ship some product. Despite the movement of fed cattle prices over $1 last week in the cash market, the futures markets weren't able to sustain the momentum in the spot month. Rosa said the contract market had been pushing hard all week last week to move past $100 in the spot month, however, after topping out at $101 during last Thursday's session, the contract turned lower before the bell, closing down 92 points at $99.05. The remaining live cattle contract months on the Chicago Mercantile Exchange ended the session last Thursday mixed. June closed 67 points lower at $95.75 and August shed 37 points to close at $92.80. October and December were both 27 points higher, closing at $96.45 and $96.17 respectively. Feeder Cattle Feeder cattle markets showed another sharp increase last week for the second week in a row. The increase in fed cattle prices, coupled with the significant increase in the Chicago Mercantile Exchange index from $100.80 the previous week to $103.92 as of last Thursday, were major contributing factors. With the fed cattle market on the rise, feedlot owners are able to pay higher prices for feeder calves to begin filling pens. “I think what's happened is that the futures market (for fed cattle) has rallied to a point that feedlots feel very comfortable purchasing feeder cattle at a higher price,” said Colorado feedlot owner Steve Gabel. “We can market against a higher contract price if the futures market is indicative of that.” The futures price for corn is also a contributing factor as the May futures corn market price has fallen to $4.05 per bushel. Although experts say the decrease in corn prices do not necessarily warrant the significant increase in feeder cattle prices, Gabel says that it is a factor worth considering. “I think that feedlot owners are constantly watching their cost outputs,” he said. “With grain futures decreasing, cattle feeders can buy the grain today at a lower cost than anytime over the last six to eight weeks.” Another factor that is influencing feeder cattle prices is the combination of moisture and the increase in temperatures, especially across the southern states, that has caused pastures to green up. This has motivated cattle buyers to purchase younger, thin cattle, with intentions of turning them out to pasture. In Billings, MT, feeder steers reportedly sold for $4 to $5 higher when compared to the previous week. Feeder heifers sold for $3 to $5 higher. Demand last week was good on all weights of feeder cattle. Steers weighing 550 to 600 lbs. sold steady averaging between $114.75 and $129. Heifers weighing an average of 560 lbs. sold for an average of $105.25. Heavier weight steers weighing 700 to 750 lbs. called for $100 to $105 while their heifermates sold for an average of $96.25. When compared to the previous week, feeder cattle sold steady to $3 higher in Torrington, WY. There were some instances of $4 to $6 higher on five and six weight heifers. The demand at the auction was moderate to good with more than 3,500 head sold. Five weight steers averaged $134 and the heavier offerings, steers averaging 726 lbs., sold for $104.71. Heifers weighing 523 lbs. averaged $116.21 while the heifers weighing in at 720 lbs. called for $100.85. Just south in Sterling, CO, with over 1,100 head consigned, feeder steers and heifers sold $2 to $5 higher than the previous week. Stocker calves headed to grazing programs sold with a definite higher undertone noted. Buyer attendance was good with very good demand on all classes of cattle. Steers averaging 511 lbs. sold for $129 while the heavier steers, weighing an average of 739 lbs. called for $103.78. Heifers averaging 543 lbs. sold for $108.38. Eight weight heifers sold for $90. In Amarillo, TX, feeder steers and heifers under 500 lbs. were steady while consignments over 500 lbs. were $2 to $3 higher. Demand and attendance was good in spite of the wet weather conditions. Steers weighing between 500 and 600 lbs. averaged $112 with prices going as high as $131. The heavier steers, between 700 and 800 lbs. called for an average of $104.50. Heifers weighing 500 to 600 lbs. sold for an average of $109 and seven to eight weight females called for an average of $96.75. Oklahoma City, OK, had another large run this week with over 11,000 head consigned although the quality was not a high as the previous week. In spite of lower quality consignments, feeder cattle were still steady to $2 higher with stockers reportedly selling for $2 to $5 higher. Demand was very good, especially for thin grazing cattle. Oklahoma saw almost two inches of much needed rain last week and pastures are beginning to green up nicely. Thin 440 lb. steers sold for as much as $141 while heifers that were similar in type and kind called for $120.50. Thin yearlings averaging 619 lbs. sold for an average of $121.97 and their heifer counterparts called for $105.15. Fleshy, yearling females at the same weight sold for an average of $94.13. Further east in Joplin, MO, just under 10,000 head of feeder cattle were consigned to their weekly sale. Steers under 800 lbs. were $2 to $5 higher while steers over 800 lbs. called for $1 to $3 higher. Heifers were $1 to $3 higher with the exception of heifers under 400 lbs. which were $3 to $5 higher. The demand was good. Five to six weight steers called between $123 and $134. Heifers weighing 300 to 400 lbs. sold for $122 to $129 while the heavier females, weighing between 700 and 800 lbs. sold for an average of $94. In Ogallala, NE, feeder calves sold for $2 to $8 higher. Demand was active on all weights of cattle. The best offering of steers were steers averaging 677 lbs. and they called for an average of $112.67. Their heifermates sold for an average of $107.05. Steers weighing an average of 873 lbs. were also well represented and they sold for $102.62 while heifers that were of similar weight called for $95.10. Jamestown, ND, had a relatively large run with over 2,100 consignments. Feeder steers and heifers sold $1 to $3 higher. There was good demand for all classes of feeder cattle. The majority of steers averaged between 600 and 800 lbs. The steers weighing an average of 643 lbs. called for $116.65 and the heavier consignments, averaging 814 lbs., sold for $100.86. The majority of heifers averaged between 585 and 750 lbs. Females weighing an average of 586 lbs. sold for $105.47, and heifers that weighed 737 lbs. called for an average of $94.93.

Read more
Thursday, December 20,2007

Cash market tops $1 again

by WLJ
Lower corn adds to feeder prices. For the second time this year, cash prices topped the $1 level last week. Packer buyers raised the stakes, bidding cash fed cattle prices $4-5 higher on a dressed basis in Nebraska and the western Corn Belt. Additionally, prices were $3-4 higher on a live basis last Thursday in the southern tier where buyers paid $100-100.50 live basis. Volume was reportedly good in all regions, with more than 70,000 head trading hands through last Wednesday. The jump in market prices, coupled with a decline in corn and the likelihood of continued upward gains in the cash market, spelled good news for feedlots last week. After months of tough close out margins, things are definitely looking up for cattle feeders as the market heads into its seasonal peak. Growing consumer demand for beef and the current state of feedlots will lend itself to a good pricing structure for some time to come. Last week’s higher trade came reportedly as a result of packers being short-bought in most areas rather than significant gains in the cutout or positive packer margins. Margins were estimated by HedgersEdge.com to be in the red last Thursday, with packers losing $9.40 per head. Although cutout values are rising seasonally, and expected to surpass $165 on the Choice, they remain below last year’s levels. Last Thursday, Choice cutout values were reportedly $157, a gain of 67 cents over the prior day. Select was up 92 cents, trading at $148.16. Packer harvest was also below last year’s level, with 117,000 head slaughtered last Thursday, 3,000 head below the previous Thursday and 7,000 fewer than the same day in 2006. Through last Thursday, packers had harvested 473,000 head, 11,000 fewer than the same period a week earlier. For the week, the industry was expecting a total harvest of approximately 614,000 head, well above last year’s number of 583,000 head during the same week. However, some of the downward pressure of heavy slaughter volume has been alleviated by lighter live cattle weights this year which are currently averaging 16 lbs. less than the same time last year. Cow slaughter numbers are also running ahead of last year. The recent dairy herd buyout by Cooperatives Working Together of 54,000 head will add numbers to the already high cow harvest and further downward pressure on the cow cutout values. According to University of Missouri Agricultural Economists Glenn Grimes and Ron Plain, short forage supplies and higher prices are believed to be the major reasons for the larger cow slaughter which has short-circuited the growth in the cow herd for at least some time, they said. “For the year through the week ending March 10, total cow slaughter was up 13.4 percent from a year earlier. Dairy cow slaughter was up 12 percent and beef cow slaughter was up 14.6 percent from 12 months earlier,” Grimes and Plain said in their weekly market report. That higher than average harvest dropped the cow beef cutout value to $105.08 last Thursday, compared to the same week last year when cutout prices were $114.33. The 90 percent lean last Thursday was trading at $126.05, down from more than $145 a year ago. In comparison, the 50 percent lean is trading well above last year’s level at $73.37, compared to just $45.24 a year ago. The higher cash market last week also lent itself to boosting the futures market. Traders on the Chicago Mercantile Exchange (CME) pushed prices higher across the board last Thursday during the holiday shortened week. The spot month April contract was the biggest gainer during the session, rising 140 points to settle at $100.45. June live cattle issues gained 77 points, closing the day at $96.32 and August contracts rose 72 points to end the session at $94.32. Feeder cattle Feeder cattle have been trending higher since late January and last week proved to be no different. The CME index gained 96 cents, to $108.02 last Thursday, up from $105.54 the week prior. On Monday and Tuesday last week, corn traded limit lower, as a result of a USDA plantings report well above industry expectations. The substantial decrease in the corn market, both in cash and futures, was a significant factor in the continued increase of feeder cattle prices last week. Additionally, feedlots which purchased feeder steers at a lower price months ago have been enjoying increased fed cattle costs in recent weeks. This, coupled with the expected decrease in cost-of-gain in the short-term, has allowed cattle feeders to spend more money in an effort to fill feedlots. “I think the feedlots started making a little bit of money over the last two or three weeks for the first time in several months,” said Dillon Feuz, professor of agriculture economics and livestock marketing and farm management specialist at Utah State University. “They were able to purchase feeder cattle at a discounted price for some time. Now, they are taking those animals to market and are receiving a good price for them. The break in corn prices is allowing feeders to take a position on lower corn futures and is probably lowering their break-evens when compared to last winter,” he said. Feuz adds that he expects corn to be very volatile over the next few months as the 90 million proposed acres will likely change as a result of weather. “There is a chance that we will see more fluctuation in corn acres over the next few months and the feeder cattle market will probably become jittery as well,” he predicted. In auction markets last week, however, the tone was higher almost across the board. In Billings, MT, feeder steers under 600 lbs. sold mostly steady when compared to the previous week and those ranging from 600 to 650 lbs. were $3 to $5 higher. Steers weighing over 650 lbs. were steady to $2 higher. In fact, steers averaging 700 lbs. sold for an average of $100.25. There was good demand on all classes of steers and heifers. In Sioux Falls, SD, feeder steers and heifers over 700 lbs. sold mostly $1 to $2 higher. Last week's offering displayed more attractive quality and larger drafts than the previous week. Buyer attendance was reportedly good with good demand. Steers averaging 742 lbs. sold for a median price of $106.88. Heifers in similar weight and flesh conditions, averaging 719 lbs., brought an average price of $98.77. Much like the previous week, fleshy cattle were discounted. Heifers that averaged 717 lbs. and were in fleshy condition sold for only $92.14. Valentine, NE, had a light offering of replacement quality heifers with a steady undertone noted. Demand was good as nearly all of the feeder cattle were females of replacement quality. Heifers averaging 659 lbs. sold for $102. A large lot of replacement quality females, averaging 714 lbs., sold for $119. In La junta, CO, steers and heifers were mostly steady on the kind offered. There were instances of $2 higher on steer calves of quality. Yearling feeder steers were steady to $2 higher in calves over 800 lbs. Yearling heifers in a light test remained steady. Trade was moderate to active and demand was good. Steers weighing between 620 to 635 lbs. sold for an average of $119.50 while the yearlings which averaged 825 lbs. were worth $104.50. Heifers averaging 520 lbs. sold for $117 and females averaging 820 lbs. sold for $96. To the east in Salina, KS, over 4,400 head were sold last week. Feeder steers ranging between 400 and 850 lbs. sold steady to $1 higher and those between 850 and 1,000 lbs. were steady to $1 lower. Feeder heifers weighing 350 to 600 lbs. were $1 to $2 lower and those weighing between 600 and 900 pounds remained steady in comparison to the previous week. Five-and-one-half weight steers averaged $129 but a lot of steers averaging 554 lbs., which were value added, were worth $136.50. Eight weight steers averaged $102. Five weight heifers averaged $115 while the heavier females, averaging 850 lbs., sold for an average of $93.95. Oklahoma City, OK, sold almost 7,000 head again last week. Feeder and stocker steers were steady to $2 higher. Feeder and stocker heifers were $2 to $3 higher. Demand was very good for all classes. Steers weighing between 500 and 550 lbs. averaged $131.31 and their fleshy counterparts sold for only $125. Heifers of a similar weight were worth $119.54. In Abilene, TX, feeder steers and heifers under 500 lbs. were $3 to $5 higher. Trade was moderate and the demand was called good. Five weight steers called for $115 and their heifermates sold for an average of $97.50. Yearling steers were worth between $118 and $128 and heifers $103 to $109.

Read more
Thursday, December 20,2007

West Coast market buys Superior Livestock Auction

by WLJ
It was disclosed last week that Superior Livestock Auction has sold the nation’s largest livestock video auction. The sale will include Superior Livestock Auction, Superior Stampede, the Internet marketing division and Superior Productions, which produces purebred sales and other special events. Superior was sold to Dwight and Helen Mebane of Woody, CA. The closing is to be completed sometime prior to June 1. It was announced that Richard Stober will become the new general manager for the company. The Mebanes are a third generation ranching family with operations in California and Oregon. They are also partners in a Friona, TX, feedlot and own and operate Western Stockman’s Market in Famoso, CA. Stober has extensive experience in all phases of the livestock industry. He has managed several livestock auction markets and is also an auctioneer. Both Mebane and Stober said that they are excited about the future and are proud of Superior’s accomplishments in the past. Superior and Mebane assure that the transition will be smooth and that no changes in personnel or business practices will occur. Jim Odle, Buddy Jeffers and John McKinley will attend the special summer auctions to assist the new owners in the transition.

Read more
Thursday, December 20,2007

More federal land access proposed

by WLJ
for. April 11, 2005 Many producers are seeking access to federal land when burdened by drought or lack of private land for expansion. Other producers feel their state property taxes are too high. Congressman Chris Cannon, R-UT, addressed both of these issues by introducing H.R. 1370, the Federal Lands Asset Inventory Reform Act (FLAIR). FLAIR would require the Secretary of Interior to perform a comprehensive inventory of all federal land assets. Cannon believes this will assist with better federal land management and also identify surplus, unneeded or vacant properties that the government would no longer have any interest or reason to own and transfer this surplus to the state. This type of a national movement is long overdue in Cannon= s opinion, since nearly one-third of the land in U.S., more than 670 million acres, is designated as federal land. Cannon said that the Bureau of Land Management alone has more than three million acres that have been identified as surplus and suitable for disposal. From a tax perspective for the state, Cannon said that this means states that host the government have a severely diminished tax base and cannot fully meet the demands of the federal government to fund law enforcement, environmental compliance, health care and education, as well as other mandates. Cannon did note that the federal government compensates the loss of tax revenue through the Payment in Lieu of Taxes program (PILT), but he said Congress has consistently failed to fully fund the program. For example, this year= s PILT funding request of $200 million is $26 million less than last year and is $150 million short of full funding. Last year was the highest ever funding for PILT, and the program was still over $100 million short, according to Cannon= s estimates. A The result is taxpayers pay more in local property taxes to make up the shortfall,@ said Cannon. If the FLAIR Act is approved by both the House and the Senate, then states would be able to disperse taxes across a broader land base, thus reducing property taxes. President George W. Bush= s 2006 budget contains a proposal that is in line with Cannon= s agenda. The proposal asks for a review of federal lands in the District of Columbia to determine if they would have more value if owned by the District. A I applaud the president for initiating an inventory of surplus federal land to be taken over by the District or the private sector,@ said Cannon. A Especially in the private sector, such real estate can produce jobs and generate tax revenues for the District.@ Cannon illustrated his theory of lost revenues using D.C. as an example. He said, in the District, where 26.3 percent of the total acreage is owned by the federal government, an estimated $400 million to $1.1 billion a year is lost in tax revenue to federal ownership of these lands. And, Cannon said, D.C. is a small problem compared to the western states. In Cannon= s home state of Utah, federal ownership runs approximately 66.5 percent. Utah and eleven other western states rank above D.C. in percentage of federal land ownership. Cannon noted that Nevada is 90 percent federally owned, while California is approximately 50 percent federally owned and nearly two-thirds of New Mexico and Arizona are owned by the federal government. Cannon is chairman of the Congressional Western Caucus. The Congressional Western Caucus is a bicameral organization of nearly 60 members of Congress from the West who want to sustain a vibrant Western economy for present and future generations. From a management viewpoint, the congressional supporters also hope the FLAIR Act will help the federal government gauge its land holdings. A The federal government really does not have an accurate assessment of what it owns, so it is tough to believe that the government can effectively manage the land if they don= t know where they are at or what they are being used for,@ said Cody Stewart, executive director of the Congressional Western Caucus. Cannon agreed, saying that the fire hazard has gotten out of control due to lack of management and that federal grazing lands are in terrible shape, as compared to privately owned lands. Cannon also said, A The president should ensure that the federal land inventory he ordered last year is completed and that ownership of surplus and under-utilized land is transferred to the states. This will bolster Western economies by giving them more tax revenue and job-creation opportunities.@ In the meantime, Cannon is asking that the president support a fully funded PILT program, so that rural communities can begin to support the services for which they rely on these payments. To complement this legislation, Stewart said the Western Caucus is also supporting a bill that would set up a mechanism whereby the government would attempt to acquire additional lands in a state that has more than 25 percent in federal ownership and a bill, which is yet to be introduced, that deals with the impacts that federal land has on education. Stewart encouraged producers to contact their congressmen and express support for these pieces of legislation. C Sarah L. Swenson, WLJ Associate Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

Read more
Thursday, December 20,2007

Fed cattle market remains strong

by WLJ
Cash fed cattle trade was moderate in the northern Plains by mid-day last Thursday and light in the south Plains ahead of an expected severe winter storm. Compared to the previous week, dressed sales in Nebraska and Colorado traded steady at $160 with a few as high as $161. Live sales were mostly steady to $1 lower with the prior week at $99-100. Prices last week were well above year ago levels despite the slight dip with live and dressed cattle prices approximately 20 percent higher than a year ago. In the southern Plains, prices were mostly $1 lower at $99, despite a strong surge in the boxed beef market last week. A slip in the Chicago Mercantile Exchange (CME) futures market may have contributed to some feedlots accepting lower prices despite expectations of higher cash trade this week. When the cash market moved lower, so did the contract trade. CME live cattle issues fell 257 on the spot month to close last Thursday at $97.35. June lost 215 points and August lost 220 points, closing at $92.47 and $90.70 respectively. Despite the slip in cattle cash and futures prices last week, prices for boxed beef moving into the higher demand months of spring continues to make big gains which, in turn, are improving packer margins and fueling hopes for higher cash trade in the weeks ahead.  Prices for Choice beef surged nearly $5 last Wednesday to $171.96, while the Select product gained $2.43 to trade at $159.23. The following day, both Choice and Select product continued to gain, moving up nearly 50 cents each during morning trading to $172.44 and $159.64 respectively, light demand and offerings. Packers were in the black last week as a result of those gains in the beef trade. HedgersEdge.com estimated a positive return of $39.80 per head for packers last Thursday. Those gains helped packers ramp up harvest levels over the prior week’s levels. For the week through last Thursday, packers had harvested 475,000 head, 2,000 more than the prior week and 31,000 more than the same week a year earlier. There are some mixed expectations for the USDA’s cattle on feed report, set to be released April 20. Pre-report estimates from the Livestock Marketing Information Center are for a 2.1 percent drop in the number of cattle on feed as of April 1. Placements are expected to be 4.2 percent ahead of March 2006 and Marketings 4.4 percent below year-ago levels. The numbers, if they come in as expected, will be supportive of near term price increases for the fed cattle market. The placement pattern of last fall, combined with the continued lingering effects of winter weather, is expected to be supportive of beef prices for the next several weeks as consumer demand grows going into the warmer spring months ahead. Already, there is much talk of feedlots pulling cattle forward as they continue the aggressive marketing stance in an effort to take advantage of the currently strong market. Another significant bright spot for the beef trade is the current run-up in cow prices.  Despite a dairy herd buyout and continued higher than normal cow slaughter, the cow beef cutout values remain quite strong. The cow cutout value last Thursday gained $2.90 in the morning trade to reach $113.19, well above last year’s price of $104.61. Meanwhile, the 90 percent lean rose nearly $3 to trade at $139.53 compared to last year’s price of $128.12. The 50 percent trim also continued to trade well at $98.29 in comparison to year earlier levels of $45.03. Those strong retail values have continued to support the cull cow market well past seasonal highs, traditionally reached early in the year. Current cull cow prices should have producers headed to town with any remaining cull cows to take advantage of the current situation. Feeder cattle Feeder cattle continued their upward trend as they sold for higher prices at auction markets across the western region. Again, cattle producers remain optimistic about turning cattle out on grass as we continue into spring, in spite of a spring snowstorm that swept across the western states late last week. Dr. Derrell Peel, extension livestock marketing specialist at Oklahoma State University, says although states like Oklahoma are average for total precipitation, more rain will be required. “At the current time, it appears that conditions are favorable for more summer stocker production and for renewed heifer retention and herd rebuilding,” he said. As of last Wednesday, the CME index was up from $108.02 the previous week, closing at $109.40. Even though the May 2007 corn futures increased again last week to $3.55/bu., it seemed to have minimal effect on the feeder cattle market. Peel says that total planting intentions of various crops is above 5.5 million acres this year. He says that many of those acres are currently in pasture. “It is not clear yet exactly what we are trying to do, let alone what Mother Nature is going to let us do,” he said. He says the livestock markets will be subjected to a lot of uncertainty in the coming months stemming from crop production and weather patterns as well as the day-today marketing concerns which include beef demand and trade. “In general,” said Peel, “cattle prices are fundamentally strong now and likely to remain so, but the potential for market volatility is enormous.” In Billings, MT, feeder steers and heifers were steady to $2 higher. Steers weighing 510 to 570 lbs. sold between $125 and $129.50. The heavier steers weighing between 740 and 790 lbs. were worth $95 to $99. Heifers that averaged 525 lbs. sold for $114 and females weighing 830 lbs. were worth $97. Huron, SD, had over 3,000 head consigned last week. Feeder steers and heifers sold steady to $3 higher when compared to the previous week. Demand was good with many load lots in the offering. Some of the cattle were carrying mud. Several high quality 700 lb. heifers sold as replacements. Steers averaging 591 lbs. called for an average price of $125.39. The steer offerings went well into the 900 lb. range. Nine weight steers were still worth $102.04. Heifers weighing an average of 529 lbs. sold for $117.50. Females of replacement quality weighing 731 lbs. sold for $107. In Riverton, WY, feeder cattle sold mostly steady with instances of $1 to $2 higher. Steers over 600 lbs. were mostly steady to $1 to $3 higher. Feeder heifers of similar weights were steady with instances of $1 to $5 lower on heifers weighing 750 to 800 lbs. Demand was good to moderate. To the east in La Junta, CO, all weights of feeder steers and heifers were mostly steady with quality a determining factor. Yearling feeder steers were steady to $1 higher. Steers averaging 530 lbs. sold for $134.25 and heavier steers weighing 820 lbs. called for $106. Feeder heifers averaging 605 lbs. sold for $107.50. Further east in Creighton, NE, feeder cattle trended 43 to 44 higher. The overall quality of the cattle was good, with strong buyer attendance and demand. Steers averaging 540 lbs. sold for $120.50; those weighing an average of 831 lbs. called for $105.54. Heifers weighing 525 lbs. sold for an average of $112.71 and the heavier females, weighing an average of 820 lbs., were worth $100.88. At the Oklahoma Stockyards, feeder steers were once again $1 to $3 higher. Stocker steers remained steady while feeder and stocker heifers were unevenly steady. Demand for feeder steers was very good and moderate to good for heifers and stockers. Steers averaging 532 lbs. sold for $132.86 and those averaging 832 lbs. were worth $106.49. Five weight heifers were worth $117.75 and the eight weight females called for $95. In Amarillo, TX, feeder steers and heifers were steady to $2 higher. Trade and demand were moderate. Steers weighing 540 to 565 lbs. were worth $125 to $132.50. Their heifermates sold for an average of $114.

Read more
Thursday, December 20,2007

Johanns highlights conservation side of Farm Bill

by WLJ
Agriculture Secretary Mike Johanns last week highlighted the administration’s Farm Bill proposals related to conservation. Johanns pointed out that a key theme throughout the conservation title is simplification and streamlining of programs, while increasing funding for conservation by $7.8 billion over 10 years. “In the area of conservation, we heard during our Farm Bill forums broad acknowledgment of our successes, but also suggestions to make the programs more user-friendly,” said Johanns. “We are proposing to do just that and to bolster our commitment to conservation through the largest increase in funding for any title within our farm bill proposals.” Under current law, there are six cost-share programs, all of which have separate eligibility requirements, sign-up periods, regulations and applications. They include the Environmental Quality Incentives Program (EQIP), the Wildlife Habitat Incentives Program, the Ground and Surface Water Conservation Program, the Agricultural Management Assistance Program, Forest Land Enhancement Program, and the Klamath Basin Program.  The administration proposes consolidating all six into one program under the EQIP umbrella which can address multiple resource issues. This would include a new Regional Water Enhancement Program. Funding for this newly structured program would be increased by 30 percent, or an additional $4.25 billion over 10 years. The Regional Water Enhancement Program would allow producers to use a broad range of conservation tools to address water quantity and/or quality issues on a regional scale. Mandatory funding of $175 million annually would be available to coordinate conservation solutions for working agricultural landscapes, including crop, pasture, grazing and orchard lands. The administration proposal supports re-authorizing the Conservation Reserve Program (CRP) at its current acreage level. CRP would continue to focus on retiring lands that provide the most significant environmental benefits. However, priority would be given to the enrollment of whole fields that qualify to produce perennial biomass crops for cellulosic energy production. Continuous CRP enrollment and the Conservation Reserve Enhancement Program would also continue. The Conservation Security Program (CSP) would be simplified by creating two tiers of conservation achievement, instead of three, by removing base, maintenance, and cost-share payments. CSP would be enhanced to provide incentives for higher levels of conservation practices. Under the proposal, CSP enrollment would expand from 15.5 million acres to an estimated 96.5 million acres over 10 years. CSP would also be offered nationwide on an annual basis, instead of in select watersheds. Funding for the program would increase $500 million over 10 years, which would take the program to $8.5 billion during FY 2008-2017. The three existing easement programs for working lands—the Farm and Ranchland Protection Program, the Healthy Forest Reserve Program, and the Grasslands Reserve Program—would become one new Private Lands Protection Program with a shared goal of protecting farmland and open space. Funding would be increased by $900 million over 10 years. Conservation compliance provisions would be broadened to discourage the conversion of grassland to crop production. Between 1982 and 2002 acreage in non-federal grasslands fell by 24 million acres. A ‘Sod Saver’ provision would help retain private grass and rangelands by making its conversion to crop land ineligible for farm price and income support. The Wetlands Reserve Program (WRP) would be enhanced and expanded. The enrollment cap would expand from 2.3 million acres to 3.5 million acres with an annual goal of enrolling 250,000 acres. The easement function of the Emergency Watershed Program and the WRP would be combined into one WRP. Mandatory funding of more than $2 billion would be added to the program. Likewise, the Emergency Watershed Protection Program and the Emergency Conservation Program would become one new Emergency Landscape Restoration Program. This would create a one-stop source for landowners and communities in need of emergency conservation assistance following a catastrophic event. To encourage participation in conservation programs by beginning and socially disadvantaged farmers and ranchers, the administration proposes designating 10 percent of conservation financial assistance to these groups. This will enable beginning and socially disadvantaged producers, who typically farm smaller acreage, to more effectively compete for conservation dollars. Lastly, to spur the development of ecosystem service markets that would establish a value for agriculture and forestry conservation practices, the administration would invest $50 million. These funds would be used to develop uniform standards for quantifying environmental services, to establish credit registries, and to offer credit audit and certification services. Ultimately, producers could earn credits for conservation efforts which, in turn, could be sold to achieve environmental goals such as sequestering carbon, protecting endangered species, and other measures that enhance the nation’s environment.

Read more
Thursday, December 20,2007

Ethanol plant emission rules relaxed

by WLJ
The Environmental Protection Agency (EPA) took a major step to stimulate ethanol production by issuing a rule last week allowing ethanol plants to operate with fewer environmental rules and less air pollution equipment. The agency rejected pleas by clean-air advocates and increased the amount of nitrogen oxide, sulfur dioxide and other pollutants that will be allowed before an ethanol plant is considered a “major air emitter,” a category that requires more stringent regulation. The change will increase the threshold for installing the best air pollution control equipment from 100 tons of pollution annually to 250 tons. It will also allow ethanol plants to avoid counting emissions from vents and other minor plant sources when tabulating those thresholds. The new rule would not apply in urban areas already dealing with air quality problems. EPA spokeswoman Jennifer Wood said the rule was designed to make sure that all forms of ethanol production and the distillation of alcohol for human consumption “are treated equally under the Clean Air Act.” Up to now, most ethanol plants have been treated like chemical manufacturers for purposes of air pollution regulation. The ethanol industry and its backers in Congress pushed hard for the new rule and the White House, a staunch supporter of biofuels, helped make the case for the change. National Corn Growers Association said the rule is beneficial to his members and a reflection of a trend toward larger plants. Many local and state air-pollution officials opposed the change. They said the new rule will make their tasks more difficult in controlling pollution both from new ethanol plants and current plants that will be able to expand without installing pollution-control equipment. Missouri Gov. Matt Blunt was one of two governors who formally endorsed the rule change in a letter to the EPA. The second was South Dakota Gov. Mike Rounds.

Read more
 
 
User Box (click to open)
 
SEARCH IN WLJ
Sign up for our newsletter!
   
 
S M T W T F S
1 2 3 4
5 6 7* 8* 9 10* 11*
12* 13* 14* 15 16* 17* 18*
19* 20* 21* 22 23 24 25*
26 27* 28 29* 30 31*
 
 

© Crow Publications - Any reprint of WLJ stories, except for personal use, without permission, written consent and appropriate attribution is prohibited. 2008 Crow Publications. All rights reserved.